Not a downgrade… but a lower number

FY26 result (full year ended 30 June 2026). Reporting currency: A$

Management have been talking to a medium term 30% revenue growth target for a number of periods, but dropped it from the investor pack this result and are now talking to a four year ARR growth CAGR number in the 20s. In their mind they didn’t walk away from it, they’re just talking to a different timeframe now.

I don’t think the buyside really needed the 30% revenue growth number to be hit for the stock to work. But when management removes a growth aspiration it is typically not taken well.

As an aside, in general I find the Australian market is much harsher with consensus or management downgrades than in offshore markets. ‘Downgrades are never priced in’ is a particularly well liked local expression.

But in any event, the reality is there are some good numbers here. ARR growing in the 20s and EBITDA this result doubled year on year and management are guiding to an FY30 EBITDA margin doubling from here.

When it comes to a core channel manager product, very consistently the industry tells me SiteMinder is the go-to when looking for a global option. It’s pretty rare in any growth industry to have such consistent feedback and that shouldn’t be under appreciated by investors.

How about the growth building blocks on top of property adds?

Channels Plus on paper made a lot of sense to me but it hasn’t seemed to get much traction. Management are talking to an important next iteration later in the year.

They are upbeat on Dynamic Revenue Plus (their RMS product). Which is interesting because that is a very crowded field, and my industry feedback has been on the softer side and some of the management pitch hasn’t quite aligned with my industry discussions.

Taken together, going silent on the 30% does align.

Bigger picture questions…is there an AI upside angle (in terms of inventory connectivity)? I think probably no. Others, particularly the PMSs, seem better placed.

Do the PMSs effectively consume the channel managers and become the hotel OS? That’s a debate, although the Mews partnership is interesting from that perspective.

But hotel tech as a general comment is sticky and has inertia, so I think the path of least resistance is SiteMinder’s core channel manager product keeps chugging along up and to the right in a hugely fragmented market.

In terms of AI risk, I don’t think vibe-coding is the discussion, but how the consumer buys and what that might mean to a channel manager is a discussion. But, back to that stickiness of hotel tech point…

Good growth, great operating leverage, mostly AI defensible (I think), stock has halved. Not a bad story.

SiteMinder issued its first quantitative, time-bound multi-year guidance. The medium-term 30% revenue growth target does not appear; the guided metric changes from revenue to ARR.

FY27 outlook. "In FY27, SiteMinder expects its adjusted EBITDA margin to expand meaningfully. ARR growth is expected to be in the 20s, supporting continued strong revenue growth on a constant-currency and organic basis." Revenue growth is framed as supported by ARR growth rather than guided alongside it. Management declined on the call to say whether FY26's 24.1% (cc, organic) is the high point, redirecting to the four-year CAGR framing.

FY30 framework. The margin target runs from an FY26 adjusted EBITDA margin of 10.6%, the ARR CAGR from FY26 closing ARR of $313.7m.

The 30% target. Carried at every result from FY25 through H1FY26, it does not appear in the release, presentation or Annual Report. The first question on the call put it as a downgrade. "I don't see it as a downgrade. I say it's a different guidance. Previously we said 30% medium term. It was unbounded in time. What we are giving now is a CAGR all with a four year period."

Basis. Both ARR commitments are struck constant-currency and organic, at budgeted rates of AUD/USD 0.65, AUD/GBP 0.48 and AUD/EUR 0.56; the margin commitments carry no currency qualifier. FY26 ARR grew 24.1% (cc, organic) against 14.9% on a reported basis.

FY26 was guided at the FY25 result and narrowed at the half (by guiding for the 2H outcome), in neither case with a number. No item was changed or withdrawn.

Revenue. More than 85% of customer billings are denominated in currencies other than AUD, and the gap between 22.0% (cc, organic) and 18.6% on a reported basis is second-half translation from the stronger dollar.

Gross margin. Adjusted subscription margin +62bps to 87.0% on scale and AI-enabled efficiencies; adjusted transaction margin +577bps to 39.4% on Smart Platform mix. Mix was a headwind — transaction grows faster and carries the lower absolute margin — but both components improved enough to more than offset it, and adjusted group gross margin rose 84bps to 67.2%.

Operating costs. Sales and marketing rose 14.5% against revenue up 18.6%, falling from 28% to 27% of revenue; general and administration rose 12.7%; research and development rose 24.4%. Product development spend rose from 19% to 21% of revenue, partly funded from automation efficiencies in maintenance engineering.

One-off items. Adjusted EBITDA of $28.1m sits $3.8m above reported EBITDA, and that gap is restructuring and other costs. The same bridge in FY25 was $7.3m. The restructuring covers globalisation of the employee base — approximately 50% of employees are now located in Asia and Latin America.

Cash and working capital. Capitalised development rose 23.6% to $32.0m. Working capital contributed $5.5m and moderates from here, as "the increasing mix of offerings billed in arrears is expected to impact the historical working capital contribution in the near term".

LTV/CAC improved to 6.6x from 6.2x, LTV up 9.2% to $29,857 against CAC up 1.8% to $4,529.

Transaction product uptake rose 10.4k to 45.4k.

Rule of 40 reached 25.9% on the free cash flow methodology and 25.2% on cash EBITDA.

Available funds were $61.6m: $31.6m cash and a fully undrawn $30.0m facility.

EMEA. Grew fastest at 24.5% (cc, organic) in FY26, against 19.7% in FY25, on the largest base of the three regions — while properties grew slowest, at 10.4%.

APAC. Grew 21.8% (cc, organic) in FY26 against 17.4% in FY25, with the fastest property growth at 14.2%.

AMERS. The only region to decelerate, to 17.8% (cc, organic) in FY26 from 20.6% in FY25, moving from the fastest-growing region to the slowest. Travel conditions were softer than in the other two regions, and management located the macro effect in transaction revenue, where US exposure is concentrated.

Category mix. Transaction revenue reached 41.7% of group revenue in FY26, from 38.0% in FY25. Transaction ARR closed at $144.3m against subscription ARR of $169.4m.

The second half. Reported growth slowed sharply — group revenue from +25.5% in H1FY26 to +12.6% in H2FY26 — but most of that is translation, not trading: on the constant-currency organic basis growth was 23.0% in H1FY26 against 22.0% for the full year. The rest is a hard comparative from cycling the Smart Distribution Program step-up recorded at the end of FY25.

SiteMinder now sells its distribution engine to the platforms it used to sit beside, and Mews is the first buyer. ‘SiteMinder Powered’ launched 28 May 2026; the agreement entered 28 July appoints Mews "a non-exclusive, authorised reseller of SiteMinder's channel management services". No fee structure, term or minimum volume is disclosed and the financial effect is not yet determined. It went live for new sales the week before the result.

Nine slides on AI but a bit light on numbers. New-customer win rates up more than 10%, support cost per case down more than 10%, code-change throughput more than doubled. No AI-attributable revenue is disclosed.

Dynamic Revenue Plus more than doubled to over 50,000 rooms, and is being onboarded by hand. Retention after trial exceeds 70%, weekly active use above 60%. A revenue management team walks each hotel through the product "over the first three to four months", pending product automation to cut that manual effort.

Transaction ARR of $144.3m is closing on subscription ARR of $169.4m. Transaction ARR grew 37.1% (cc, organic) against subscription's 15.1%, cycling 48.3% growth in FY25. Transaction revenue is 41.7% of the group.

The CFO of four years and the product chief both change seats, announced on the day the framework is issued. Tim Howard becomes Chief Partner Officer on 1 November; Kevin O'Sullivan, CyberCX Group CFO since 2019, succeeds him. Samantha Lawson became Chief Product Officer on 1 August, succeeding Leah Rankin, who steps down for personal reasons.

Q: What caused the downgrade of the 30% medium-term revenue growth target?
A: "I don't see it as a downgrade. I say it's a different guidance. Previously we said 30% medium term. It was unbounded in time. What we are giving now is a CAGR all with a four year period...So I'd say it's a different type of guidance. Compared to the previous guidance we had."

Q: Linear EBITDA margin expansion from FY26 to FY30?
A: "...in terms of EBITDA margin, we have said on FY27 that it's going to be a meaningful increase in margin in FY27. But you would expect and we would expect continuous progression to the mid 20s target that we outlined".

Q: Main FY27 growth drivers now the Smart Distribution Program is cycled?
A: "There was a meaningful step up at the end of FY 25. With smart distribution. And so FY26 ARR is already cycling that big step out coming from smart distribution...There's a big relaunch of channels plus it's growing in customer terms, but there's a product we launch that is due for the next couple of months. That actually really opens up the TAM for what channels plus can provide."

Q: When does the Dynamic Revenue Plus optimisation capability land?
A: "We've got a revenue management team that actually...effectively onboard the hotel and then they walk them through the product over the first three to four months and spend an hour or two with each customer...we're obviously waiting for some of the product automation to come so we can reduce some of that manual effort...We're seeing good adoption. We're seeing nice retention as well through that period."

Q: Competitive position once that capability ships?
A: "Competitors have aspects of these. But not the entirety of it. Particularly the forward looking at the granular level and tying it into execution...that is no solution in the market anywhere close to it. When people talk about Revenue management system, for the most part, they're talking about the third box price optimization."

Q: Did macro conditions affect the result?
A: "...we did actually see some macro impact...it was not Middle East directly...And largely transaction and we have quite a lot of transaction in the US, as you know."

Q: Is FY26 ARR growth the high point?
A: "...we said in the 20s specifically".

Q: When does Channels Plus monetisation ramp in earnest?
A: "...it's actually contributing now...it's contributing and growing in a month on month. Where the big unlock is what we're doing in terms of the marketplace...there's a big launch coming in late October / November...channels plus needs tailoring to the needs of the various OTAs."

Q: Is there an LTV/CAC level that would justify investing more for growth?
A: "...We'll see how we evolve. But we also given a very explicit EBITDA margin expansion. So I think we want to make sure that everything fits within the context. Obviously, we want to drive unit economics...We are actually focusing on larger size properties, which means larger GBV property...we have actually given a formal...margin guide. And so we want to make sure that everything fits within that."

Q: What got ARR to the FY26 year-end number, and what carries FY27?
A: "...the step up in FY 25 second half...was SDP, the smart distribution program was the key contributor. And that's what we cycled against this half...we talked about the movement of dynamic revenue plus filling that gap. And that's what happened during the second half...moving into FY27, we see the same components on the revenue side. So the revenue side is pretty much a mirror image of the ARR that we've got at the end of the year."

Q: Are new products assumed in the FY27 outlook?
A: "...we're not baking any heroic assumptions on new products coming into contributing."

Q: Transaction gross margin into FY27 and beyond?
A: "...we don't break out individual margins in terms of that. But I think if you look at our results, you can see the impact of smart platform in the margin. And that's a key deliverable that really gives us encouragement going to next year that the transaction margin through smart platform is accretive...the acceleration we're seeing in smart platform is something we really want to highlight in terms of how that mix evolves into FY 27, FY30."

Q: DirectBooker status and the SiteMinder Powered pipeline?
A: "...we actually can work going on for that to be active. We've done all of it on our end and the connection is happening at this point in time...The way we're saying is want to be agnostic and neutral as much as possible...The really good thing about the plan we got all channels covered...So no matter which way it goes, the platform is neutral enough to capture the value from whichever way."

Q: Where is SiteMinder Powered implementation focused now?
A: "...The product is live...There has there are continuing discussions. Other players are very interested. We are actually having an engagement at this point in time."